Capital goods restriction under Rule 57Q bars Modvat credit for aluminium sheets outside the prescribed chapters.

Aluminium sheets classified under Chapter 76 were held not to qualify as capital goods for Modvat credit under Rule 57Q of the Central Excise Rules, 1944 because the rule confined eligibility to the prescribed chapters, and Chapter 76 was not included. As a result, aluminium sheets under sub-heading 7600.20 were ineligible for credit, the assessee's claim failed, and the order granting Modvat credit was set aside. The stated principle is that goods falling outside the chapters or items specified in the capital goods definition under Rule 57Q do not qualify for Modvat credit.

---

---

Issues: Whether aluminium sheets falling under Chapter 76 were eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The relevant definition of capital goods under Rule 57Q was confined to the prescribed chapters. Chapter 76 was not among the chapters covered by that rule, and therefore aluminium sheets classified under sub-heading 7600.20 could not qualify as capital goods for the purpose of Modvat credit.

Conclusion: The claim for Modvat credit on aluminium sheets was not admissible under Rule 57Q and was decided against the assessee.

Final Conclusion: The Revenue succeeded and the order allowing Modvat credit was set aside.

Ratio Decidendi: Goods not falling within the prescribed chapters or items under the capital goods definition in Rule 57Q of the Central Excise Rules, 1944 are not eligible for Modvat credit.

---